The document provides an overview of Chapter 20 which covers money, financial institutions, and the Federal Reserve. It includes 7 learning goals that cover what money is, how the Federal Reserve controls the money supply, the history of banking and the Federal Reserve system, the various institutions in the US banking system, protecting deposits during crises, technological advancements in banking, and international banking organizations.
What is Financial Market :
Mechanism that allows people to buy and sell financial securities (such as stocks and bonds) and items of value at low transaction cost.
Markets work by placing many interested buyers and sellers in one “place”, thus making easier for them to find each other.
Basic Concepts of Indian Financial System: Structure and Components: Indian financial system in India, Role of
financial system in economic development. Introduction to financial Institutions – Banking – Non Banking Institutions.
Role and Functions of Banks and their Contribution to Indian Economy. Introduction to Financial Markets, Functions and
Classification. Money Market, Capital markets, Bond markets, Commodity markets, Money markets, Derivatives markets,
Futures markets, Foreign exchange markets, Crypto currency market
IBF is a facility wherein the US Banking institutions provide banking services such as granting loans, accepting deposits, to foreign residents and foreign banks.
To know more about it, click on the link given below:
https://efinancemanagement.com/international-financial-management/banking-facility
What is Financial Market :
Mechanism that allows people to buy and sell financial securities (such as stocks and bonds) and items of value at low transaction cost.
Markets work by placing many interested buyers and sellers in one “place”, thus making easier for them to find each other.
Basic Concepts of Indian Financial System: Structure and Components: Indian financial system in India, Role of
financial system in economic development. Introduction to financial Institutions – Banking – Non Banking Institutions.
Role and Functions of Banks and their Contribution to Indian Economy. Introduction to Financial Markets, Functions and
Classification. Money Market, Capital markets, Bond markets, Commodity markets, Money markets, Derivatives markets,
Futures markets, Foreign exchange markets, Crypto currency market
IBF is a facility wherein the US Banking institutions provide banking services such as granting loans, accepting deposits, to foreign residents and foreign banks.
To know more about it, click on the link given below:
https://efinancemanagement.com/international-financial-management/banking-facility
May 13, 2015 Webinar
Presented by EDR & EBA
“The Dodd-Frank Act” is all over the news. It’s reportedly killing community banks, and will impact all of the banking members in this distribution in some capacity. In continuation of a February Environmental Bankers Association - Risk Management Call (EBA-RMC) John Rybak and Greg Lampe of BB&T Bank, and attorney Brad Merrill of Snell-Wilmer, will provide an explanation of what’s going on, notably with respect to Banking Vendor Management (“vetting the vendors”).
Since its passage in 2010, implementation and interpretation of the 2,323 page long Dodd-Frank Act has touched most every part of banking including how banks use vendors, particularly in the area of mortgages and consumer compliance. Five years later there remains substantial uncertainty as new rule making continues. During our call we will provide a summary of key regulatory areas every banker should be aware of in vendor management as well as some of the general results of Dodd-Frank and exposure for non-compliance.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
2. Chapter
Twenty
LEARNING GOALS
1. Explain what money is and what makes money
useful.
2. Describe how the Federal Reserve controls the
money supply.
3. Trace the history of banking and the Federal
Reserve System.
4. Classify the various institutions in the U.S. banking
system.
20-2
3. Chapter
Twenty
LEARNING GOALS
5. Briefly trace the causes of the banking crisis
starting in 2008 and explain how the government
protects your funds during such crises.
6. Describe how technology helps make banking
more efficient.
7. Evaluate the role and importance of international
banking, the World Bank, and the International
Monetary Fund.
20-3
4. Profile
BEN BERNANKE
Federal Reserve
• Bernanke is a former Princeton
economics professor.
• Former President George W.
Bush appointed Bernanke
Chairman of the
• Almost every
Federal Reserve in 2006.
factor related to
the economy is
influenced by the
decisions he
makes.
20-4
5. Chapter
Twenty
NAME that COMPANY
This bank-like store in Austin, Texas, was
designed to serve low-income clients who don’t
have traditional bank accounts. Customers pay
a one-time $10 fee that allows them to cash
checks and put the money onto debit cards.
Name that company!
20-5
6. What is
Money? WHAT’S MONEY?
LG1
• Money -- Anything people generally accept as
payment for goods and services.
• Barter -- The direct
trading of goods or
services for other goods
or services.
20-6
7. What is
Money? STANDARDS for a
LG1 USEFUL FORM of MONEY
• Portability
• Divisibility
• Stability
• Durability
• Uniqueness
20-7
8. What is the
Money
Supply? The MONEY SUPPLY
LG2
• Money Supply -- The amount of money the
Federal Reserve makes available for people. The
money supply is referred to as:
- M1 -- Money that can be accessed quickly
(coins, paper money, travelers’ checks, etc.).
- M2 -- M1 + money that may take a little time to
obtain (savings accounts, mutual funds, etc.).
- M3 -- M2 + big deposits like institutional money
market funds.
20-8
9. What is the
Money
Supply? NEW MONEY
LG2 Paper Money Printed in 2010 (In $ Billions)
Source: Bloomberg Businessweek, December 20, 2010.
20-9
10. What is the
Money
Supply?
HOW LONG DOES
LG2 PAPER MONEY LAST?
Source: Federal Reserve, www.federalreserve.gov, accessed September 2011.
20-10
12. What is the
Money
Supply? MONEY FACTS
What You Might Not Know About What’s in Your Wallet
LG2
• In 2009, the U.S. printed 26,000,000 bills a day!
• Each penny costs 1.6¢ and each nickel costs 6¢
to make.
• The most-tracked bill on WheresGeorge.com has
travelled over 7,600 miles in 4 years!
• 2/3 of all U.S. $100 bills are outside the U.S.
• 90% of paper money has traces of cocaine!
Source: Fast Company, February 2011.
20-12
13. The Global
Exchange of
Money
EXCHANGING MONEY GLOBALLY
LG2
• Falling dollar value: The amount of goods and
services you can buy with a dollar decreases.
• Rising dollar value: The amount of goods and
services you can buy with a dollar increases.
• What makes the dollar fall or rise is the position
of the U.S. economy relative to other global
economies.
20-13
14. The Global
Exchange of
Money
The IMPACT of a
LG2 FALLING DOLLAR
• Overseas demand for U.S. products rise.
• A favorable exchange rate for U.S. companies
increases profits in foreign markets.
• U.S. tourism increases
which is good for hotels,
resorts, theme parks,
and retailers that serve
international travelers.
20-14
15. Basics About
the Federal
Reserve
FIVE MAJOR PARTS of the
LG2 FEDERAL RESERVE SYSTEM
1. The Board of Governors
2. The Federal Open
Market Committee
3. 12 Federal Reserve
Banks
4. 3 Advisory Councils
5. The member banks of
the system
20-15
17. Basics About
the Federal
Reserve
MANAGING the MONEY SUPPLY
LG2
• The Fed uses three basic tools:
1. Reserve Requirement -- A percentage of
commercial banks’ checking and savings accounts
they must keep in the bank or in non-interest-bearing
deposits at the local Federal Reserve district bank.
2. Open-Market Operations -- The buying and
selling of government bonds.
3. Discount Rate -- The interest rate the Fed
charges for loans to member banks.
20-17
19. Progress
Assessment PROGRESS ASSESSMENT
• What is money?
• What are the five characteristics of useful money?
• What is the money supply, and why is it important?
• How does the Federal Reserve control the money
supply?
• What are the major functions of the Federal
Reserve? What other functions does it perform?
20-19
20. The History of
Banking and the
Need for the
The ESTABLISHMENT of the
Fed
LG3
FEDERAL RESERVE SYSTEM
• A cash shortage problem in 1907 led to the
creation of the Federal Reserve System.
• Under the Federal
Reserve Act of 1913,
all federally chartered
banks had to join the
Federal Reserve.
20-20
21. The History of
Banking and the
Need for the
Fed
LARGEST BANK FAILURES
LG3
Source: http://www.FDIC.gov, accessed July 2011.
20-21
22. The U.S.
Banking
System The U.S. BANKING SYSTEM
LG4
• Commercial banks
• Savings and loan
associations
• Credit unions
• Nonbanks
20-22
23. Commercial
Banks COMMERCIAL BANKS
LG4
• Commercial Bank -- A profit-seeking
organization that receives deposits from individuals
and corporations in the form of checking and savings
accounts and uses those funds to make loans.
• A commercial bank has two types of customers:
1. Depositors
2. Borrowers
20-23
24. Services
Provided by
Commercial COMMERICAL BANKS’
Banks
LG4 SERVICES
• Demand Deposit -- The technical name for a
checking account; money is available on demand
from the depositor.
• Time Deposit -- A savings account; a bank can
require a prior notice before you make a withdrawal.
• Certificate of Deposit -- A savings account that
earns interest, to be delivered on the certificate’s
maturity date.
20-24
25. BANKING on SOCIAL MEDIA
(Social Media in Business)
• Banks are using the Internet and social media to
communicate with Gen Y customers.
• Today 29 million Bank of America customers use
online banking.
• 6.5 million customers use smartphones for mobile
banking.
• Banks are following other companies leads and
embracing social media.
20-25
26. WHAT to TELL the TELLER
(Making Ethical Decisions)
• The bank teller mistakenly gives you $320
instead of the $300 you asked for.
• You bring the error to her attention, but she
disagrees she miscounted the money.
• You wonder whether to just keep the extra $20
even though you know her accounts will not
balance at the end of the day.
• What are your alternatives? What do you do?
20-26
27. Savings and
Loan
Associations
SAVINGS and
LG4 LOAN ASSOCIATIONS
• Savings and Loan Associations (S&Ls) --
A financial institution that accepts both savings and
checking deposits and provides home mortgage
loans.
• Often known as thrift institutions because their
original purpose was to promote customer thrift
and home ownership.
20-27
28. Credit Unions
CREDIT UNIONS
LG4
• Credit Unions --
Nonprofit, member-owned
financial cooperatives that
offer the full variety of
banking services to their
members.
• As nonprofits, credit
unions enjoy an
exemption from federal
income taxes.
20-28
29. Other
Financial
Institutions
NONBANKS
LG4
• Nonbanks -- Financial institutions that accept no
deposits, but offer many of the services provided by
regular banks. Nonbanks include:
- Life insurance companies - Commercial finance
companies
- Pension funds
- Corporate financial
- Brokerage firms services
20-29
30. The RISE of the NONBANK
(Spotlight on Small Business)
• About ¼of American households don’t have a
bank account.
• Mango Store is a bank-like facility in Austin,
Texas. Clients pay a one-time $10 fee that lets
them cash as many checks as they want by
putting the money onto debit cards.
• Mango hopes its customers will increase their
earning power and remain customers over time.
20-30
31. Other
Financial WHAT ATTRACTS CUSTOMERS
Institutions
LG4 to ONLINE BANKING
• Free identity theft
protection
• Free credit score
monitoring
• Personal financial
management
• Instant messaging service
• Bank’s blog
Source: comScore, www.comscore.com, accessed September 2010.
20-31
32. Progress
Assessment PROGRESS ASSESSMENT
• Why did the U.S. need a Federal Reserve Bank?
• What is the difference between a bank, a savings
and loan association, and a credit union?
• What is a consumer finance company?
20-32
33. Protecting
Your Funds PROTECTING
LG5 DEPOSITORS’ MONEY
• The Federal Deposit Insurance
Corporation (FDIC) -- An independent agency
of the U.S. government that insures bank deposits up
to $250,000.
• The Savings Association Insurance Fund
(SAIF) -- Insures holders of accounts in savings
and loan associations.
• The National Credit Union Administration
(NCUA) -- Provides up to $250,000 coverage per
individual depositor per institution.
20-33
34. Using Technology
to Make Banking
More Efficient
TECHNOLOGICAL
LG6 ADVANCEMENTS in BANKING
• Electronic Funds
Transfer System --
Messages about a transaction
are sent from one computer to
another so funds can be
transferred quickly and more
economically.
• Debit Card -- Serves the
same function as a check; it
withdrawals funds from a
checking account. 20-34
35. Using Technology
to Make Banking
More Efficient SMART CARDS
LG6
• Smart Card -- A
combination of a credit
card, debit card, phone
card, driver’s license, and
more.
20-35
36. International
Banking and MAKING TRANSACTIONS in
Banking Services
LG7 OTHER COUNTRIES
• Letter of Credit -- A promise by the bank to pay
the seller a given amount if certain conditions are
met.
• Banker’s Acceptance -- A promise the bank
will pay some specified amount at a particular time.
• Money exchange allows companies to go to a
bank and exchange currencies to use in a
particular country (i.e. dollars for euros).
20-36
37. The World Bank
and the
International LEADING INSTITUTIONS in
Monetary Fund
LG7 INTERNATIONAL BANKING
• World Bank -- Lends most of its
money to less-developed nations to
improve their productivity and help
raise standards of living and quality
of life.
• International Monetary Fund
(IMF) -- Fosters cooperative
monetary policies that stabilize the
exchange of one national currency
for another. About 185 countries are
a part of the IMF.
20-37
38. NEW ISSUES FACING the
WORLD BANK and the IMF
(Reaching Beyond Our Borders)
• A debt crisis in Europe; Japan trying to recover from its
earthquake and tsunami; major disruptions in the
Middle East; China and Brazil are having problems with
high inflation; and rising food prices are happening all
over the planet.
• Poorer nations are having a particularly hard time
because of the high food prices.
• The IMF and the World Bank are both trying to come up
with answers to the global issues that have become
very serious.
20-38
39. Progress
Assessment PROGRESS ASSESSMENT
• What are some of the causes for the banking
crisis beginning in 2008?
• What is the role of the FDIC?
• How does a debit card differ from a credit card?
• What is the World Bank and what does it do?
• What is the IMF and what does it do?
20-39
Editor's Notes
Companies: Mango
See Learning Goal 1: Explain what money is and what makes money useful.
See Learning Goal 1: Explain what money is and what makes money useful. The new $100 bill has features like a 3D ribbon, as well as ink with microscopic flakes that shift color.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply. New Money This slide shows the value of different bills printed in 2010. In 2010 over 1 billion $1 bills, 2 billion $20 bills, and over 2 billion $100 bills were printed. Most of the value of U.S. currency is $100 bills. In 2010 the U.S. printed more bills in every category but $1s and $50s when compared to 2009.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply. How Long Does Paper Money Last? This slide gives the students an idea of the life span of paper money in circulation. The largest denomination ever printed was a $100,000 gold certificate. Share with students some interesting facts regarding U.S. currency: - Originally, U.S. currency included denominations of $500, $1,000, $5,000, and $10,000. No currency printed today is greater than $100 dollars. - The percent of U.S. counterfeit currency in circulation is estimated to be .02%. - U.S. Currency bills are 2.61 inches wide, 6.14 inches long, thickness of .0043 inches and weighs 1 gram. - It costs 4.2 cents to produce a U.S. bill. - The Bureau of Engraving prints about 16,650,000 one dollar bills per day. (Source: enchantedlearning.com)
See Learning Goal 2: Describe how the Federal Reserve controls the money supply. Money Milestones This slide illustrates some interesting dates regarding U.S. money Have students look through the dates. Which do they find most interesting or surprising and why? Ask students: How do some of the amounts listed compare to today?
See Learning Goal 2: Describe how the Federal Reserve controls the money supply.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply. Since the United States abandoned the gold standard, the U.S. dollar has depreciated by approximately 90 percent.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply. The Impact of a Falling Dollar This slide highlights some of the issues related to a falling dollar. While these points are positive, the long term implications of a falling dollar are more serious. A declining dollar will eventually result in the following: Higher interest rates on government and consumer debt. Higher inflation due to a rise in the price of imports, and commodity prices increase since most are priced in terms of U.S. dollars.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply. The Federal Reserve is a quasi-governmental agency not under the direct control of the U.S. government.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply. This slide is based on Figure 20.1.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply.
See Learning Goal 2: Describe how the Federal Reserve controls the money supply. See Figure 20.3 in text for further information.
Money can be anything that people accept as payment for goods and services. The five characteristics of useful money are: Portability, divisibility, stability, durability, and uniqueness. The money supply is the amount of money available for people to buy goods and services. It is important to manage the money supply, since too much money could cause inflation and too little money may cause deflation. To control the money supply the Federal Reserve can increase or decrease the reserve requirement, buy or sell government securities, or change the discount rate. The Federal Reserve is responsible for creating an environment that fosters stable prices and full employment. It attempts to manage these two goals with monetary policy. The Federal Reserve is also responsible for the clearing of checks.
See Learning Goal 3: Trace the history of banking and the Federal Reserve System. State banks were also permitted to join.
See Learning Goal 3: Trace the history of banking and the Federal Reserve System. Largest Bank Failures This slide highlights the largest bank failures in U.S. banking history. Three of these failures are a direct result of the financial crisis that started in 2008. Ask students: Why didn ’t the Washington Mutual and IndyMac Bank failures create a total loss of confidence in the United States banking system like we saw during the Great Depression? ( Students should be able to recognize the stepped up role of the US government including the creation of the FDIC insurance program and the increase in FDIC coverage from $100,000 to $250,000.)
See Learning Goal 4: Classify the various institutions in the U.S. banking system.
See Learning Goal 4: Classify the various institutions in the U.S. banking system.
See Learning Goal 4: Classify the various institutions in the U.S. banking system. Commercial banks also offer credit cards, financial counseling, automatic payment of bills, brokerage services, safe-deposit boxes, travelers checks, and individual retirement accounts (IRAs).
See Learning Goal 4: Classify the various institutions in the U.S. banking system.
See Learning Goal 4: Classify the various institutions in the U.S. banking system.
See Learning Goal 4: Classify the various institutions in the U.S. banking system.
See Learning Goal 4: Classify the various institutions in the U.S. banking system. Due to their exemption from federal income taxes, credit unions: fees are typically less and the interest rates paid on deposits are often higher.
See Learning Goal 4: Classify the various institutions in the U.S. banking system.
See Learning Goal 4: Classify the various institutions in the U.S. banking system.
See Learning Goal 4: Classify the various institutions in the U.S. banking system. What Attracts Customers to Online Banking This slide illustrates what attracts customers to online banking. Households have increased their use of online banking from approximately 8 million households to an estimated 51 million households in 2009. Leading the growth of online banking are California, Florida and Texas. Combined, these states made up more than 40 percent of the growth in online banking. Others in the top 10 for growth were Washington, Georgia, Arizona, North Carolina, Missouri, and Maryland. More than 71 percent of online banking customers report they are highly satisfied with their online banking experience. According to ComScore the adoption of online banking is rising at a rate of 13 percent each year. And by 2011, 76 million households will bank online compared with an estimated 51 million in 2009.
The Federal Reserve emerged after the banking crisis of 1907 and was organized originally to be a lender of last resort. After bank deregulation, the services offered by banks and S&Ls are now similar. They both offer many of the same services. Credit Unions are tax-exempt member-owned cooperatives that operate like banks. Consumer finance companies offer short-term loans to those who cannot meet the credit requirements of regular banks.
See Learning Goal 5: Briefly trace the causes of the banking crisis starting in 2008 and explain how the government protects your funds during such crises. The amount of depositors ’ insurance was increased to $250,000 create confidence in the banking system.
See Learning Goal 6: Describe how technology helps make banking more efficient.
See Learning Goal 6: Describe how technology helps make banking more efficient.
See Learning Goal 7: Evaluate the role and importance of international banking, the World Bank, and the International Monetary Fund.
See Learning Goal 7: Evaluate the role and importance of international banking, the World Bank, and the International Monetary Fund. Both the World Bank and the IMF were created to rebuild the world economy after World War II.
See Learning Goal 7: Evaluate the role and importance of international banking, the World Bank, and the International Monetary Fund.
After the internet bubble of the late 1990s, the Federal Reserve lowered interest rates creating a situation in which mortgage rates were low thus fueling a housing boom. Banks relaxed their underwriting standards and created mortgage-backed securities and sold them to organizations throughout the world. The government did not regulate these transactions well and banks collapsed as housing values fell and individuals defaulted on their loans. The role of the FDIC is to insure bank deposits if a bank were to fail. Bank deposits are currently insured up to $250,000. Unlike a credit card a debit card functions as a check, withdrawing funds directly from a checking account. The debit card only allows you to spend money that is in your account; once the balance is zero the card cannot be used. If the card is used with a zero balance, it will result in overdrafts. The World Bank, also called the International Bank for Reconstruction and Development, is responsible for financing economic development. The IMF was established to assist the smooth flow of money among nations. Nations must join the IMF and allow for flexible exchange rates, inform the IMF of changes in a country's monetary policy, and to modify policies on the advice of the IMF.